Week Ahead May 22 – 26

EUR/USD FUNDAMENTALS AND TECHNICAL

Pair closed last week’s trading session higher, as both central banks, reinforce once again their monetary policy divergence through the speeches delivered last week. ECB’s Christine Laggard comment that the central bank is not over yet from its efforts to fight inflation. On the other side FED’s Jerome Powell said rates may not have to rise as much as expected. Given the central banks’ comments and the economic releases the pair manage to recover some of last week’s losses.

As for this week, Traders and investors, will mainly focus on the US debt ceiling to be announce during this week’s trading session. If the US government reach a deal on debt ceiling we may see huge flows of cash to be invested in stock markets and result into US Dollar selloff. The FOMC minutes are due to be released on Wednesday, although no significant impact is expected. As for the rest of the week investors and traders will be focusing on the economic releases mainly from the US.

On the economic calendar, we have on Thursday, German manufacturing PMI pointing higher at 45, German Composite PMI lower at 53.5 European Composite PMI lower at 53.7 On Thursday, US Gross domestic product expected to stay unchanged at 1.1% On Friday, US durable goods orders expected lower at -0.9%

Technically the picture is neutral after last week’s close just above (38.2%). In this week’s trading session if pair continues on the upside will test 1.0925 (23.6%) A break and close below 1.0800 (38.2%) will change the picture to negative and open the road for 1.0733. We are expecting short sellers to appear above 1.0923 (23.6%) and buyers to appear at 1.0730 (50%)

GBP/USD FUNDAMENTALS AND TECHNICAL

Pair closed last week’s trading session unchanged after both central banks disappointed investors by commenting that no more rate hikes will be needed. FED’s Jerome Powell said rates may not have to rise as much as expected. BOE’s Bailey said, fewer rate increases by the Bank of England will be needed in coming months to bring down inflation.

As for this week, traders and investors will focus on the US debt ceiling to be announce during this week’s trading session. If the US government reach a deal on debt ceiling we may see huge flows of cash to be invested in stock markets and result into US Dollar selloff. The FOMC minutes are due to be released on Wednesday, although no significant impact is expected. As for the rest of the week investors and traders will be focusing on the economic releases, mainly the UK Consumer price index.

On the economic calendar we have on Tuesday, the UK Services PMI pointing lower at 55.5 On Wednesday, UK Consumer price index expected lower at 8.2% On Thursday, US Gross domestic product expected to remain the same at 1.1% On Friday, UK Retail sales pointing lower at -4.5% and US durable goods orders lower at -0.9%

Technically the pair is still positive even after last week’s close above (23.6%) As for this week if pair resumes on the upside could re-test 1.2650 Alternative if trades on the downside, will retest Aprils lows at 1.2350 (23%) if breaks below 23.6% will open the road for  38.2% Short sellers are standing between 1.2200 – 1.2400 targeting profits at 1.2000 we are expecting more aggressive short sellers on the way up and new buyers to appear around 1.2200 targeting profits above 1.2500

For more detailed economic calendar events please visit our live economic calendar on: 

http://tentrade.com/economic-calendar/

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